Litecoin
Last updated: Feb 18, 2018
Website: https://litecoin.org
Whitepaper: https://www.bitcoincash.org/bitcoin.pdf
Mission
To provide a decentralized peer-to-peer internet currency with faster transaction confirmation times, near-zero payment costs, and improved storage efficiency than the leading cryptocurrency, complementary to Bitcoin.
Overview
Genesis block: October 13th 2011
Block explorer: http://explorer.litecoin.net/chain/Litecoin
Supply limit: 84,000,000 LTC
Issuance: Block reward
Block confirmation: Proof-of-Work
Mining algorithm: Scrypt
Block size: 1mb
Developments: Segregated Witness, Lightning Network
Summary
Litecoin was created by Charlie Lee with a customized Bitcoin client. Despite this, Litecoin is not considered a fork of Bitcoin because they originate from separate genesis blocks and their blockchains are not connected. Litecoin differentiates itself from Bitcoin by processing blocks every 2.5 minutes (rather than 10), increasing the supply limit of coins to 84 million (rather than 21 million), and using Scrypt for its mining algorithm (rather than SHA-256). Throughout the lifetime of Litecoin, many of Bitcoin’s developments were first implemented in Litecoin, such as Segregated Witness and Lightning Network. Due to Litecoin’s origins, similar logo design, and shared developments, Litecoin is often given the ‘silver’ status compared to Bitcoin’s ‘gold’ status.
Scrypt mining depends on large amounts of memory in addition to fast arithmetic operations. This means dedicated mining systems that heavily utilize ASIC’s will not be as effective. In fact, regular personal computers can participate in the Litecion mining process, promoting decentralization of the network. However, this also means the exit costs become lower as well and miners may have less at stake when participating in Litecoin mining.
Block confirmation times of 2.5 minutes allows transactions to be confirmed faster and miners receive block rewards more reliably than with Bitcoin. Faster confirmations also makes it harder for miners to perform double-spend attacks because blocks will be more quickly buried under additional confirmations. However, more blocks also means the blockchain grows 4x faster than Bitcoin, causing the cost of storing the blockchain to increase as well. Faster block confirmations also causes block propagation time to be relatively more impactful. Miner’s who haven’t received the newest block in time may spend time trying to mine a previous block, wasting hashpower and reducing the security of the network.
The supply limit of Litecoin is technically 4x more than Bitcoin, but since block times are 4x faster, the supply limit remains equal a relative comparison. The current block reward is 25 LTC and will half every 840,000 blocks (roughly every 4 years). Taking into the account of Litecoin’s reduced block times, Litecoin follows an equal distribution of coins and rate of inflation to Bitcoin.
Scalability and Developments
Litecoin maintains a block-size of 1mb, but due to its reduced block times, Litecoin is inherently capable of processing 4x more transactions than Bitcoin. In addition to this, Litecoin receives less traffic and usage than Bitcoin so there is no immediate issue of scaling at this time. Although Segregated Witness and Lightning Network is implemented, they are not currently significant projects in the development of Litecoin. The network is already fast and cheap under normal conditions.